WASHINGTON -- The number of Americans filing new claims for unemployment benefits rose last week and factory activity in the nation's Mid-Atlantic region cooled in April, further signs of a moderation in economic growth.
The softening growth outlook was also underscored by another report on Thursday showing a gauge of future economic activity fell in March for the first time in seven months. They were the latest data to indicate a step-back in the economy after a brisk start to the year as tighter fiscal policy began to weigh.
"The evidence is mounting that the economy lost momentum in March and that has carried to April," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pa. "Growth is slowing down as the tax increases and sequester take effect."
Initial claims for state unemployment benefits rose 4,000 to a seasonally adjusted 352,000 the Labor Department said. The four-week moving average for new claims, a better measure of labor market trends, rose 2,750 to 361,250.
Despite the rise, which was broadly in line with economists' expectations, claims held near a level economists normally associate with average monthly job gains of more than 150,000.
That helped ease concerns of a deterioration in labor market conditions after nonfarm payrolls posted their smallest increase in nine months in March.
"Labor market conditions still appear to be grinding forward, but pushing against the weight of a slowing economy and subdued confidence," said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Mich.
Downbeat Outlook
In separate report, the Philadelphia Federal Reserve Bank said its business activity index fell to 1.3 in April from a reading of 2.0 in March. A reading above zero indicates expansion in the region's manufacturing.
Details of the survey which covers factories in eastern Pennsylvania, southern New Jersey and Delaware, were weak. Measures of factory employment and new orders contracted. A third report supported views the economy was again headed for a soft patch this spring, in a replay of the last two years.
The Conference Board said its Leading Economic Index dropped 0.1 percent to 94.7 last month, the first drop since August.
U.S. stocks fell on the data, while Treasury debt prices were little changed. The dollar fell against a basket of currencies. Last week's claims data covered the survey period for April nonfarm payrolls. Claims increased 11,000 between the March and April survey periods.
Given recent volatility because of the early Easter and spring breaks this year, claims probably aren't useful in trying to gauge April payrolls. Employers added 88,000 workers to their payrolls last month after a solid 268,000 increase in February.
While there is no doubt job growth has slowed in line with the overall economy, economists said March's meager gains overstated the labor market's weakness.
"We see nothing in the jobless claims data to either suggest that job growth has deteriorated further since March or even to support the view that March's payroll gain represents a new trend," said John Ryding, chief economist at RDQ Economics in New York.
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